Local Economies, Explained

Alright, I know this isn’t really bus-related, but it is transport economics related. So here goes.

Men selling goods at a traffic signal in Mumbai. Image copyright Vikramdeep Sidhu, CC-Attribution 2.0 Generic, available on the Wikimedia Commons.

Ever head of the local economy or the local ecosystem? Or its variants: The Traffic Signal Ecosystem or the College Ecosystem?

Any establishment that witnesses footfalls develops an informal ecosystem around it. The traffic signal ecosystem is among the best visible examples. At a traffic signal, it is not uncommon to find people selling toys, books, newspapers, flowers. The same is often visible at railway level crossings. Similarly, the temple ecosystem sees people selling flowers, camphor, fruits and other offerings outside a temple. A college ecosystem sees numerous housing units (hostels), eateries, stationery shops, tea shops, juice stalls, chaat vendors, etc. in the vicinity of a college.

If one were to take a stroll outside Andheri station in Mumbai, they would see umpteen outlets ranging from book stores, newspaper vendors, tea stalls, juice vendors, eateries, vegetable vendors, shoe stalls (cobblers), people selling stationery, clothing, jewellery and more. This is more or less the same across all major railway stations from Mumbai Central to Ahmedabad Junction to New Delhi. It is common sense that any major project will develop an ecosystem of this sort around it. A popular joke says that when Neil Armstrong first set foot on the moon, he was greeted by a Marwadi tea vendor. Point proven.

Whenever any government announces a major development project (mostly infrastructure), it is invariably met with a lot of scepticism and criticism. While scepticism stems from corruption within the system, delays in execution and the fact that some money is siphoned off within the political and bureaucratic ecosystem, criticism is more often than not based on unfounded claims.

To give a context to this discussion; I am referring to an article carried by Swarajya in January this year about the economic benefits of the Mumbai-Ahmedabad High Speed Rail (HSR) corridor, also known as the Bullet Train. While the direct benefits of the project to the economy of the belt has been discussed earlier, there are a few things that need to be addressed. As with any announcement related to a major infrastructure project, it met with a fair amount of scepticism, and predictably a lot more criticism, for various reasons. Among the various phrases thrown out describing the project, were “White Elephant”, “Showpiece”, “Waste of Money”, and “Hypocrisy” (due to the two cities being connected). Let us address these issues, keeping just the ‘Bullet Train’ in mind.

The Formal Impact

The formal impact refers to the people formally associated with the project once operational. Metro projects employ hundreds of staffers. Metro projects employ engineers, maintenance workers, public relations spokespersons, security staff, ticketing and administrative staff, locomotive pilots, etc. Given the magnitude of the project, plus the level of automation involved, the number of people formally employed will be huge. The engineers form a bulk of any mass transit project, and have a round-the-clock duty to ensure that services run uninterrupted.

Why can’t the money be used elsewhere?

On one hand we demand better services from the government, and on the other hand, we criticise it when it decides to spend money on a project that will benefit thousands.

These big ticket projects will definitely go forward in getting more people employed, be it in the formal or the informal sector.